UK's House of Lords has amended the Government's Banking Reform Bill to impose a stringent hurdle of annual qualifications on senior bankers. Meanwhile, a senior Tory peer is calling for regulators to pay for all their mistakes.

UK's House of Lords has amended the Government's Banking Reform Bill by 222 votes to 217 in favour of introducing a stringent hurdle of annual qualifications for senior bankers to attain before they can perform their functions. Meanwhile, a senior Tory peer is calling for regulators to pay for all their mistakes in the same manner as British police pay for the results of riots that they have failed in their duty to quash.

The vote, which Labour opposition peers introduced, had the support of the Archbishop of Canterbury Justin Welby, who sits on the Parliamentary Commission for Banking Standards and has always denounced the Government's proposals for reform as pusillanimous. According to someone on Labour party's shadow Treasury team, the Government has tried no less than three times to stop their lordships from voting this measure in.

The amendment is a severe slap in the face for the Chancellor, whose bill it is, and the toothless 'approved persons regime' that the newly-formed Financial Conduct Authority has inherited from its inglorious predecessor.

Simon Culhane, the CEO of the Chartered Institute for Securities & Investment, welcomed their lordships' stand in an email to Compliance Matters: “The amendment, requiring yearly validation of staff competence by the regulator, adherence to a code of conduct and the emphasis on integrity endorses and supports the minimum level of professionalism which CISI has promoted since its inception in 1992 and to which its members must comply. This development gives a push to the recommendation on professional standards in the Tyrie report which is now being further developed by Sir Richard Lambert.”

The said report dared to ask the question: “is banking a profession?” It did not think that all the necessary components of a profession existed at present but looked forward to a time when they might. Its chief suggestions about how to get there were:

1. qualifications, which would “act as a signal of quality to consumers”;
2. CPD or continuing professional development, a path down which the FCA has started to travel, albeit haltingly;
3. ethics and integrity; and
4. professional standard-enforcing bodies, a supposed reference to the ABs or 'accredited bodies' of which the CISI under the leadership of Ruth Martin is presently the largest.

Against this, the report quotes Neil Jeffares, a former senior City banker, who told its authors: “Banking is a strictly profit-making business, and is not, and never has been, a profession in the sense that, say, medicine or the law is.”

In the meantime, the former John Selwyn Gummer, now Lord Deben, has surfaced with a proposal to make the FCA pay for regulatory disasters like Arch cru. He made his suggestion by stating that the regulator should “recognise its responsibility” instead of “passing the cost of a firm's collapose on to the industry.” He was speaking in his capacity as chairman of the Association of Professional Financial Advisers at that body's gala dinner. He also called on the FCA to do more to prevent evildoers from re-entering the financial sector. He, too, had harsh words to say about the 'approved persons regime.'